Financial institutions: Banks or Insurance Companies?

by Kevin Rossier, www.hypo-advisors.ch

To finance the home of your dreams you are spoilt for choice amongst the multitude of mortgage market players.  There are, however, two very distinct branches: banking and insurance.

The majority of banks offer mortgages within the pallet of products they offer.  The principle of mortgage lending for a bank is to borrow from the market and then on-lend to its customers.   This allows the banks to be flexible when granting a mortgage and they can adapt their terms and conditions according to the relationship they have with each client.

Most insurance companies now also offer mortgages.  They finance mortgages on the basis of the assets they hold.  In general, insurance companies tend to offer unbeatable mortgage interest rates, but they are less flexible when it comes to tailoring a mortgage to a client’s individual needs.